Despite potentials, Bangladesh could not attract the expected level of foreign direct investment due mainly to the regulatory and business hurdles, top corporate executives say.
They said FDI is not only important for bringing in the latest technology, innovations and best corporate practices, it also helps create a pool of talented resources locally as a spill-over effect.
To create more employment opportunities in the densely-populated country, they suggested immediate formation of a central body handle issues centrally in coordination with the agencies concerned.
The suggestions were made on Friday at the second episode of a virtual dialogue on "Rethinking FDI: for the Many. What do investors want?"
The Youth Policy Forum organised the discussion, where president of the Foreign Investors' Chamber of Commerce and Industry Rupali Chowdhury and chief executive officer of Grameenphone Yasir Azman spoke.
Speaking at the dialogue, the FCCI president said the investors feel much comfort when there is a consistency of the policy whatever formation of the government is.
"We cannot be the best at everything. So we have to choose and pick where we have
to improve to attract FDI," Mrs Chowdhury, also managing director of Berger Paints Bangladesh Ltd, said.
Mentioning policy unpredictability a major barrier to attaining FDI in the country, she said if the effective tax rate goes up because of a sudden policy, how investors can become competitive.
She said it would take certain time to develop the physical infrastructure, but no time is required for regulatory infrastructure.
"You (the government) just automate certain things and investors do not want to see frequent changes in the tax policy. They want its continuity. So we think policy continuity is more important than the political stability," the FICCI president said.
Terming the country's plans to attract investors and create jobs through developing special economic zones across the country a good sign, she said the government needs to make at least one of the sites ready for operations.
"Things are improving in terms of ease of doing business, but there must be a central body that will be looking for all the parameters centrally and coordinate with the department concerned," she added.
CEO of Grameenphone Yasir Azman said people talked about political uncertainty hampering investment even 10 years ago, but the country came out of the problem.
"Now, we've to talk about regulatory and business uncertainty," he said.
He also suggested paying a serious attention to two more important things-development of a skilled and technology-driven workforce and digitalisation of the process to bring transparency.
"If we can provide these three things to the investors, I think solutions to other obstacles can be addressed," he said.
Talking about the spillover effect of the FDI, the GP boss said overseas investments not only bring technology, innovations and best corporate practices, it creates a pool of talents.
"It also creates an ecosystem with the development of small and medium enterprises surrounding the business. Simultaneously, it generates a pool of talents that can be exported," he added.
Both the executives also recommended the expansion of the existing tax net instead of further putting pressure on the taxpayers.
Moderating the event, former World Bank economist and YPF advisor Syed Akhtar Mahmood said the government provides incentives to lure foreign investors.
"Of course, incentive is important, but regulatory and policy certainty matters more to the investors," he said.
Mr Mahmood also laid emphasis on the proper implementation of the policies to gain confidence of the existing and potential global investors.